A Web3-related domain name is making headlines not for its product, but for the sale price.
NFTs.com recently sold for $15 million, making it one of the top-ten most expensive domain names ever publicly reported.
NFTs.com sale among most expensive, could launch new service
The deal was brokered by GoDaddy and domain name broker Domainer.com. Escrow.com provided the escrow service for an undisclosed buyer who reportedly has connections with other Web3 projects.
The sale of NFTs.com makes it one of the largest crypto-related domain name sales in history. For reference: Cars.com was the largest domain name sale ever at $872 million in 2014.
In 2017, Eth.com sold for $2 million, while Voice.com sold for $30 million two years later. The latter is an NFT platform on the EOS blockchain, while the former is not resolving which could mean the buyer has not determined a business model yet or is holding the domain as an investment.
Why is the NFTs.com domain sale significant?
NFTs have been all the rage since the popular artist Beeple sold a collage of artwork for $69 million in 2021. The sale at Christie’s auction house sparked a movement that has softened since the economy soured at the beginning of this year. But enthusiasts have not given up on NFTs as just a passing craze, as evidenced by the attendance at one of the biggest NFT conferences of the year in June.
But that only marks a milestone in NFT popularity. The real reason the sale of NFTs.com is so significant has nothing to do with NFTs or audience sentiment.
Domain name flipping has been going strong since the 1990s. Domainers find undervalued web properties and hold them until they find a willing buyer to purchase the domain name for a higher price. Good domain name flippers can make as much money buying and selling domain names as real estate investors make flipping houses. Web properties can be highly prized digital assets.
What makes NFTs.com such a praiseworthy event is its connection to Web3, the next stage in the evolution of the internet. In fact, one could say NFTs.com is to Web3 as Cars.com is to Web2.
What Makes a domain name valuable?
A study in what makes a domain name valuable could show that NFTs.com and Cars.com have more than a few things in common. First, both are what domainers call a “single-word domain name.”
One of the key criteria for domain name value is length. The shorter the better. There are a few reasons for this including the nature of search. When people search for information online, a short single-word domain name has the potential to rank high for that single word if the website follows standard search engine optimization best practices. Secondly, shorter domain names are easier for humans to remember.
Another thing Cars.com and NFTs.com have in common is that they both use the .com domain name extension. People have been trained to search for .com, .org, .edu, and .gov domain names. After 30 years, these domain name extensions are still the most valuable for web property owners.
Other domain name practices that can devalue a domain name include hyphens, numbers, and words that can be easily confused with other words due to spelling—such as “sea” and “see.”
NFTs.com checks all the boxes for valuable domains: It’s short, it contains a popular searched-for acronym or word, it utilizes a top-level domain name extension that people are hard wired to expect, and it’s easy to remember.
As interest in Web3 increases, we should expect to see other Web3 domain name sales begin to surpass NFTs.com. It took almost 15 years for the internet to value a single domain name as much as it has valued Cars.com. It’s just a matter of time before other Web3 domain names emerge as the most expensive on the internet.